ECC Energy Update - August

by Jordan Valageorgiou - Tuesday, 23 August 2011

Door to Door Sales and Telemarketing

Have you had sales marketers either knock on your door or telephone you in the evening offering you cheaper electricity? It is often hard to understand exactly what is being offered or to say no. 

In New South Wales, electricity and gas customers can choose to receive their supply from the standard retailer for their area (under a standard form contract) or take up an energy offer with another retailer.

You don’t have to take up an energy offer if you don’t want to, and your electricity and gas will continue to be supplied by the standard retailer in your area.

Also, a retailer is not obliged to provide you with an energy offer and depending on where you live, your choice of retailer may be limited as some retailers only service parts of NSW.

What is an energy offer?

Energy offers generally provide a special rate or deal if you agree to a contract. Whether the special rate is marketed as a ‘discount’ or ‘saving’, in agreeing to accept the offer you enter into a contract between you and the company. 

It is important to be aware that some offers include late fee payments of up to $15, early termination of contract fees, moving home fees, an account establishment fee and/or an extra charge for paying by credit card.

To find out about what fees could be included in your offer look on the report at  http://www.vinnies.org.au/nsw-energy-prices-nsw or visit the Energy and Water Ombudsman of NSW (EWON) website for a comparison of energy prices http://www.ewon.com.au/index.cfm/help-for-customers/switching-retailers/comparing-offers or IPART’s website comparator http://www.myenergyoffers.nsw.gov.au .

 What doesn’t change

Your quality of supply will not change if you choose a new retailer or take up a green energy offer. Your energy will come through the same poles, wires and pipes, and will still be subject to the same supply issues.

The distributor that owns the network will continue to read your meter, and they will provide the readings to your retailer, who will then bill you.

Marketing conduct

It is disappointing to note that some energy marketers continue to provide misleading information and to solicit vulnerable customers or non-account holders to take up offers.

Customer complaints show that unscrupulous marketers are taking advantage of the confusion about the NSW energy reform process by making false statements to customers. For example, some marketers told customers their company had taken over responsibility for the area from the standard retailer and the customer needed to sign a contract to ensure continued supply.

Customers also complained that the marketer assured them they would not incur a fee for switching retailers, only to find their previous retailer charged them a termination fee. This issue could be resolved by marketing scripts recommending that customers check their current contract before they switch to identify if an early termination fee is applicable.

Systemic review into telemarketing practices of one retailer

This year the Energy and Water Ombudsman New South Wales (EWON)* undertook a review of telemarketing complaints about one retailer when customers complained that they had only agreed to receive further information, but found their account transferred. Following EWON’s report the retailer reviewed their scripts, marketing practices and the training provided to telemarketers, to ensure customers were aware that they were agreeing to transfer their account.

A code of practice Door to Door Sales and Telemarketing

Recognising that the problems described above exist, the retailer peak body, the Energy Retailer‘s Association of Australia (ERAA) produced a self-regulatory scheme on door-to-door marketing. The scheme incorporates a Code of Conduct that includes standardised training and recruitment practices, the tracking and registering of door knockers, an accreditation process for sales agents, a complaints process, compliance auditing and potential sanctions against members and sales agents whose sales practices raise concerns.

Throughout the development of the Code the ECC has submitted recommendations that the information provided by the door-to-door marketers be in language relevant to the communities in which the marketer is working.  The proposed voluntary scheme includes supporting retailers and door-to-door sales companies, and will be managed by the independent company Energy Assured Limited (EAL). The ECC has now been invited to participate in the EAL Stakeholder Working Group and will continue to lobby for our members.

* Energy and Water Ombudsman New South Wales (EWON) provides a free, fair and independent dispute resolution service for all electricity and gas customers in New South Wales, and some water customers.

Some of this information was taken from EWON and CUAC websites